Family Income Protection

Family income benefit or family income protection insurance is a particular type of life insurance policy that will help to provide a regular income over a set period of time to your loved ones. Family income benefit insurance can offer a cost-effective way to provide financial support for your family for a set amount of time.

By taking out family income benefit cover, you can provide a simple, regular income that can be easily managed by your family. It can help your family to make the money last for a longer period than if it were a lump sum, providing a much easier way to handle the budgets and keep on top of paying bills.

If you have dependents such as children or a partner who would struggle without your income on a monthly basis, family income benefit can help to cover the cost of living and help them to live as normally as possible.

Having family income protection insurance in place will provide you with peace of mind in knowing that should you pass away, your family can receive manageable amounts of income each month so that they do not struggle financially.

How does family income benefit work?

You are able to decide on the amount your loved ones will receive each month, and how long the protection should last. You will pay a monthly premium based on this, in order to secure that level of cover. It is important that you consider how much income your family might need in order to be financially stable.

If you were to pass away during the term, the cover will pay your loved ones an income for the remainder of the policy term. For instance, if you have a 20-year policy and you pass away 10 years into it, the policy will pay out for the remaining 10 years. It can serve as a protection for the financial impact of a death in the family.

However, it is worth remembering that family income benefit insurance is similar to decreasing term life insurance. This is because the total your family will receive will decrease as the years go by.

If you do pass away, family income benefit insurance will pay a regular, fixed, tax-free income for your family. It is important to note that if you pass away after the policy has expired, there will be no pay-out.

Family income benefit cover is particularly beneficial for young families that may include children. Many people ensure the policy term will last until their children are able to financially support themselves. If you want the highest level of financial coverage for your family, you might want to consider other term life insurance types such as whole of life or level term.

If you are taking out a family income benefit policy to help your loved ones pay off a large debt, such as a mortgage, it may be more beneficial to take out a policy that pays out a lump sum, such as decreasing term insurance or level term insurance.

The cost of family income benefit

Family income benefit is generally seen as a cost-effective type of life insurance. However, the cost of your premiums will depend on a number of different factors. For instance, the older you are, the higher your premiums may be.

Your health can also play a part in determining your policy details. If you have pre-existing medical conditions, or you smoke and drink in excess, this can lead to increased premium payments.

The cost of family income benefit insurance can depend on how long you want the policy term to last. If you want a longer term, your premiums may be higher. Furthermore, the more generous the income you want to give your family, the more you will pay each month for the policy.

Family income benefit with critical illness cover

You may be able to take out a family income benefit plan that may provide the option of critical illness cover as an additional policy. This can provide a lump sum for your family if you are suddenly diagnosed with a serious condition or need to undergo surgery.

Family income benefit insurance will only pay out if you pass away during the term. If another eventuality was to happen, such as a critical illness or accident, you might benefit from having family income benefit with critical illness cover.

If you are not sure which policy type is right for you, the team at Caspian Insurance can provide you with the right guidance and advice. We do the hard work for you by comparing policies with your best interests in mind, and can ensure you have a full understanding of your policy.

Please note that the descriptions above do not constitute financial advice and may change depending on individual circumstances and budgetary requirements.

This calculator is for informative purposes only and is not to be taken as financial advice, for accurate financial advice please consult with an advisor from Caspian Insurance.